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Mr.   H.L.   Leupp 


The  Public  Land  Policy 

Of  the  United  States  in 

ALASKA 


AN  ADDRESS  BEFORE  THE 

Northwest  Mining  Convention 

SPOKANE 

February   16th,   1912 


BY 


MAURICE    D.   jLEEHEY 

812  Alaska  Building    ^^          Seattle 


L 


The  Public  Land  Policy 

Of  the  United  States  in 

ALASKA 


t 


By  MAURICE  D.  LEEHEY 


The  American  people,  or  those  who  interest  themselves  in  Alaska 
enough  to  read  about  it,  are  pretty  well  satisfied  that  there  is  something 
radically  wrong  in  the  laws  for  that  territory,  and  in  the  government 
policy,  or  lack  of  policy,  toward  the  Treasure .  Land  which  constitutes  our 
last  frontier.  Alaska  .progressed  rapidly  during  the  ten  years  which  fol- 
lowed the  rush  to  Cook  Inlet  in  1896.  With  the  discovery  of  gold  in  the 
Yukon  came  the  prosperity  of  Circle  City  and  Rampart.  Then  the  world- 
famed  Klondyke  rush,  the  first  Nome  boom,  and  the  development  of  the 
Fairbanks  region.  Through  all  this  growth  and  prosperity  we  heard  much 
talk  of  an  All- American  route  to  the  Yukon,  and  saw  some  action  to  that 
end.  Work  was  initiated  upon  at  least  five  routes  over  which  it  was 
planned  to  build  railroads  from  the  southern  coast  to  the  Interior.  But 
during  that  same  period  there  was  also  discovered  deposits  of  splendid  coal, 
seemingly  the  one  commodity  needed  to  assure  the  permanence  of  Alaska's 
prosperity  and  the  speed  of  her  development.  This  discovery  which  prom- 
ised so  much  good  for  Alaska,  has  so  far  borne  but  evil,  for  while  the 
year  1906  proved  the  banner  year  of  Alaskan  gold  production,  that  same 
year  also  witnessed  the  withdrawal  of  all  coal  lands  in  Alaska  from  entry, 
and  the  suspension  of  railroad  building  to  the  Interior.  Instead  of  inaugu- 
rating a  period  of  splendid  progress,  the  discovery  of  coal  brought  stagnation 
and  retrogression.  No  doubt  the  population  of  Alaska  increased  rapidly 
from  1896  to  1906,  but  it  much  diminished  during  the  following  four  years, 
as  the  census  of  1910  showed  an  increase  in  population  of  only  764  people 
over  the  census  of  1900.  This  was  not  sufficient  to  cover  the  increase  bv 
the  birth  rate  over  deaths.  So  the  census  of  1910  shows  that  Alaska  actually 
lost  population,  so  far  as  immigration  is  concerned,  during  the  preceding 
ten  years.  Prof.  Tarr  says  in  a  recent  issue  of  the  North  American  Re- 
view: "The  towns  of  Alaska,  with  hardly  an  exception,  have  lost  popula- 
tion, and  vacant  houses  and  stores  exist  by  the  score.  People  are  closing 
up  business  and  leaving  there  in  general  despondency,  especially  in  the 
coastal  portions,  which  have  been  looking  forward  to  the  impetus  that  should 
result  from  the  building  of  railroads  and  the  development  of  the  coal 
fields." 

This  loss  of  population  is  remarkable  when  we  consider  the  results  of 
that  brief  period  of  development.!  Alaska  poured  more  than  two  hundred 
million  dollars  worth  of  minerals  into  this  country.  The  gold  output  rep- 
resents $196.000,000,  while  $8,000.000  have  been  realized  from  Alaska  cop- 
per since  1901.  Even  if  we  disregard  the  millions  obtained  in  fish  and  furs, 
the  production  of  which  does  not  necessarily  indicate  material  development 
of  the  territory,  surely  the  mineral  production  is  such  as  to  justify  many 
times  the  present  white  population  of  approximately  35,000  people. 


3 

The  reason  is  found  in  the  treatment  of  Alaska  by  the  government  of 
the  United  States,  and  no  one  has  yet  had  the  timerity  to  justify  that 
treatment.  Those  who  criticise  the  laws  passed  by  Congress  for  the  de- 
velopment of  Alaska  contend  that  other  laws  should  have  been  passed,  and 
each  party  to  the  controversy  blames  the  other  for  the  condition  in  Alaska. 
The  people  who  went  to  Alaska,  and  undertook  the  development  of  her 

resources,    have    been    the    least    considered    in    all    this    discussion.    Only 

recently  were  they  given  a  delegate  in  Congress  without  vote.  They  are 
denied  local  self-government"  many  form,  and  while  we  may  be  antago 
nized  by  the  statement  that  every  charge  made  by  the  Colonists  against 
King  George  in  the  Declaration  of  Independence  can  be  truthfully  made  by 
the  people  of  Alaska  against  the  government  of  the  United  States,  yet  when 
we  closely  analyze  that  statement,  we  must  admit  it  indeed  difficult  to 
deny./  It  is  also  true  that  the  people  of  Alaska  may  urge  many  causes  of 
complaint  not  mentioned  in  the  illustratrious  Declaration  penned  by  Thomas 
Jefferson.  Certainly  we  have  no  record  in  the  history  of  the  Colonies  of 
where  the  British  Government  ever  deliberately  and  openly  violated  its 
contracts  in  the  manner  in  which  the  government  of  the  United  States 
has  arrogantly  violated  the  contracts  which  arose  with  people  of  Alaska 
claiming  under  the  Public  Land  Laws. 

Of  course,  some  reason  exists  for  this.  The  men  charged  with  the 
administration  of  public  affairs  are  not  necessarily  to  be  charged  with 
dishonesty  or  bad  faith.  A  wild  popular  clamor  has  arisen,  and  while  from 
our  point  of  view  we  cannot  admit  this  as  an  excuse  for  ignoring  the  law, 
yet  means  have  been  found  and  lines  of  argument  have  been  produced  to 
justify  the  position  taken  in  each  particular  case.  _But  the  Alaskans  arj 
Americans.  Practically  all  of  them  came  directly  from  the  States,  and  every 
state  m  pur  union  is  represented  in  Alaska  by  some  of  her  most  enter- 
prising sons  and  bravest  daughters,  jf  Consequently,  the  Alaska  people  are 
patriotic,  and  they  have  exercised  for  years  a  patient,  philosophical  patrio- 
tism, because  they  have  confidence  in  the  honesty  of  the  American  people, 
and  know  that  when  the  American  people  are  fully  and  correctly  informed 
justice  will  be  done. 

The  administration  has  for  several  years  recommended  legislation  with 
reference  to  Alaska  without  visible  results.  In  the  meantime  laws  appli 
cable  to  Alaska  have  been  suspended  by  the  withdrawal  of  public  lands 
from  entry.  Naturally,  Alaskans  are  disposed  to  criticise  the  administra- 
tion quite  as  much  for  its  failure  to  proceed  under  existing  laws  as  to  blame 
Congress  for  the  failure  to  enact  new  legislation.  It  is  popularly  under- 
stood that  the.  coal  question^  is  the  most  important  problem  in  Alaska.  This 
is  not  entirely  true.  The  great  problem  is  that  of  transportation,  and 
the  coal  question  is  chiefly  important  for  its  bearing  upon  transportation. 
Alaska  requires  railroads  to  the  Interior,  and  it  is  manifest  that  these 
railroads  will  not  be  built  until  the  Alaska  coal  is  placed  upon  the  market. 

Coal  was  mined  in  Alaska  by  the  Russians  long  years  ago,  probably 
soon  after  the  settlement  of  Sitka  and  Kodiak,  the  oldest  towns  on  the 
Pacific  Coast  of  America,  whence  supplies  were  shipped  to  California  and 
along  the  Pacific  Coast  before  San  Francisco,  San  Diego,  or  Seattle  were 
founded.  These  Russian  coal  mines  though  never  became  of  commercial 
importance,  and  our  American  people  paid  no  attention  to  Alaska  coal 
until  after  the  discovery  of  gold  in  the  Interior. 

The  general  coal  land  laws  of  the  United  States  were  extended  to 
Alaska  by  the  Act  of  June  6th,  1900.  Prior  to  that  time  attempts  were 
made  to  locate  coal  lands  in  Alaska,  but  there  was  no  law  permitting  the 
same,  and  even  the  general  coal  land  act  of  1873  has  been  inoperative  be- 
cause it  applies  only  to  surveyed  land,  and  the  public  surveys  have  not 
been  extended  to  Alaska.  The  act  though  encouraged  several  men,  in  the 
utmost  of  good  faith,  to  attempt  locations,  and  much  work  was  done  on 
the  ground  to  explore  and  better  reveal  the  deposits  of  coal  as  shown  by 
surface  croppings.  The  simple  men  who  did  such  work  were  innocent 


M1G0463 


enough  to  believe  that  the  law  meant  something,  and  that  by  complying 
with  it  as  best  they  could,  their  rights  would  sometime  be  recognized. 

After  another  delay  of  four  years  Congress  passed  the  act  of  1904 
which  provides  for  coal  land  locations  by  private  surveys.  Such  legisla- 
tion was  urged  upon  Congress  by  the  President's  message.  Congress  acted, 
and  on  April  28th,  1904,  the  President  approved  the  law  now  in  force 
permitting  individual  entries  of  160  acres  of  coal  land  to  be  designated  by 
private  surveys  at  the  expense  of  the  applicant.  About  1000  coal  claims 
were  located  under  this  Act.  Some  300  of  these  have  been  surveyed  at 
the  sole  expense  of  the  claimants,  who  have  also  paid  into  the  United 
States  Treasury  nearly  $400,000.00,  but  so  far  not  a  single  patent  has  been 
issued.  It  has  been  charged  that  most  of  these  claims  are  invalid.  We 
presume  that  only  the  officials  of  the  General  Land  Office  have  sufficient 
knowledge  to  speak  of  all  entries,  but  we  do  know  of  certain  claims  which 
are  entirely  valid,  made  in  strict  compliance  with  the  law,  and  which 
should  have  been  patented  years  ago.  We  know  of  men  who  went  into 
both  the  Katalla  and  Matanuska  regions  and  spent  their  time  and  money 
in  the  utmost  good  faith,  strictly  complying  with  the  law  in  its  every 
detail.  Indeed,  some  of  these  men  have  actually  lived  upon  their  claims 
during  all  these  weary  years  of  waiting.  Such  applications  there  are 
which  have  been  pending  for  four  years  and  more,  and  yet  no  action  has 
been  taken,  no  charges  filed,  and  in  some  cases  not  even  the  slightest  sug- 
gestion of  an  irregularity  has  been  made,  although  during  all  of  these  years 
a  score  of  field  agents  have  been  at  work,  interviewing  claimants  and 
other  persons  who  might  have  some  knowledge,  and  employing  every  means 
of  a  skilled  detective  force  to  ascertain  possible  fraud  or  irregularities. 

Has  this  long  delay  been  caused  by  a  gigantic  conspiracy  to  unlawfully 
acquire  and  monopolize  the  Alaska  coal  fields?  Or,  was  it  caused  by 
another  conspiracy,  which  has  for  its  object  the  nullification  of  the  laws 
solemnly  passed  by  Congress,  and  the  substitution  of  a  leasing  system  in 
the  Alaska  coal  fields,  without  any  regard  to  the  rights  of  those  people 
who  proceeded  in  good  faith  according  to  law? 

Thirty-one  months  after  the  President  signed  the  Act  of  April  28th, 
1904,  that  same  President  issued  an  executive  order  withdrawing  all  these 
coal  lands  from  entry.  The  executive  order  nullified  the  act  of  Congress. 
The  order  was  so  sweeping  as  to  even  suspend  action  upon  claims  already 
filed,  and  the  Kegister  and  Eeceiver  were  thus  compelled  to  refuse  to 
file  notices  of  locations  made  even  prior  to  the  withdrawal.  Some  months 
later  the  order  was  modified  so  as  to  permit  action  upon  existing  entries. 
It  was  admitted  that  patents  should  issue  to  valid  claims  located  between 
April  28th,  1904,  and  November  12th,  1906,  but  so  far  all  that  has  been 
done  is  to  file  charges  against  some  of  the  claimants,  which  charges  have 
resulted  in  an  order  for  the  cancellation  of  one  group.  But  we  repeat 
there  are  many  applications  which  remain  pending  after  all  these  years 
without  any  action,  not  even  charges  filed  or  suggested.  Why  this  long 
delay?  Surely  the  illegal  acts  of  one  should  not  entirely  prevent  action 
upon  the  claims  of  another  against  whom  no  charges  have  been  made. 
Bather  was  not  this  delay  caused — and  is  it  not  continued,  in  furtherance 
of  another  conspiracy  to  force  a  leasing  system  upon  the  Alaska  coal 
fields? 

This  situation  is  the  more  aggravating  because  most  of  these  particu- 
lar claimants  have  agreed  to  accept  patents  under  the  limitations  of  the 
Act  of  May  28th,  1908.  This  act  applies  only  to  claims  located  prior  to 
November  12th,  1906,  the  date  of  the  President's  withdrawal.  This  later 
act  permits  the  consolidation  of  such  claims  in  groups  of  not  to  exceed 
2560  acres,  and  was  intended  to  cure  defects  which  might  have  Resulted 
from  the  location  of  a  group  of  claims  in  common,  or  with  intention  to 
combine  after  obtaining  patents.  It  is  manifest  that  a  coal  mine  cannot 
be  operated  upon  160  acres.  Consequently,  many  of  these  claims  were 
located  in  groups  by  men  represented  perhaps  by  the  same  agent,  and  to 


some  extent  acting  jointly,  each  individual  however  locating  one  claim 
and  holding  it  independently,  but  having  in  mind  possibly  that  some  plan 
of  joint  action  might  be  adopted  after  the  issuance  of  patents.  Congress 
intended  to  validate  any  irregularities  in  such  locations,  but  imposed 
severe  conditions,  as  will  be  noted  by  Section  3  of  the  Act  of  1908  which 
reads  as  follows: 

"^  "  That  if  any  of  the  lands  or  deposits  purchased  under  the  provisions 
of  this  act  shall  be  owned,  leased,  trusteed,  possessed,  or  controlled  by  any 
device  permanently,  temporarily,  directly,  indirectly,  tacitly,  or  in  any 
manner  whatsoever  so  that  they  form  part  of,  or  in  any  way  effect  any  com- 
bination, or  are  in  anywise  controlled  by  any  combination  in  the  form  of 
an  unlawful  trust,  or  form  the  subject  of  any  contract  or  conspiracy  in 
restraint  of  trade  in  the  mining  or  selling  of  coal,  or  of  any  holding  of  such 
lands  by  any  individual,  partnership,  association,  corporation,  mortgage, 
stock  ownership,  or  control,  in  excess  of  two  thousand  five  hundred  and 
sixty  acres  in  the  district  of  Alaska,  the  title  thereto  shall  be  forfeited  to 
the  United  States  by  proceedings  instituted  by  the  Attorney  General  of 
^the  United  States  in  the  courts  for  that  purpose. ' ' 

This  is  certainly  the  most  stringent  anti-monopoly  clause  possible  to 
frame  in  the  English  language.  But  nearly  four  years  more  have  passed 
since  this  drastic  legislation,  and  still  no  action  has  been  taken.  Is  such 
Departmental  inaction  but  the  reflection  of  public  sentiment?  Perhaps  it 
is.  Perhaps  it  but  expresses  a  conviction  of  the  American  people  that  the 
public  land  system  which  gave  the  great  west  the  most  splendid  develop- 
ment in  the  history  of  the  world,  cannot  now  be  extended  to  Alaska;  that 
the  enactment  by  Congress  to  do  so  was  a  mistake,  for  which  the  honest 
coal  claimants  in  Alaska  must  suffer,  and  those  who  took  their  little  all 
of  health  and  goods  into  Alaska,  in  full  confidence  that  the  laws  of  the 
United  States  would  be  enforced,  must  suffer  loss  because  they  had  too 
much  faith  in  the  integrity  of  our  government.  Be  that  as  it  may,  it  is 
unquestionably  a  fact  that  had  the  same  policy  been  pursued  in  the  early 
settlement  of  the  middle  west  that  is  now  being  pursued  toward  Alaska, 
the  buffalo  would  still  be  King  of  the  Plains,  Chicago  would  still  be  a 
frontier  town,  Kansas  City  would  be  a  mere  trading  post  at  the  edge  of  the 
Great  American-  Desert,  and  the  now  splendid  cities  of  Denver,  Spokane  and 
Minneapolis  would  not  even  be  names  upon  the  map. 

This  policy  has  manifested  itself  in  the  most  arrogant  assumption  of 
power  against  which  we  have  no  protection,  because  there  is  apparently 
no  legal  remedy.  Consider  the  withdrawals  made  by  President  Roosevelt 
without  authority  of  law.  The  want  of  such  authority  was  tactily  ad- 
mitted by  the  executive  in  its  request  that  Congress  pass  a  law  conferring 
such  authority.  The  withdrawal  simply  amounted  to  a  notice  that  the 
Land  Department  would  not  execute  the  law;  that  its  officers  would  not 
perform  the  duties  which  they  took  solemn  oath  to  perform,  nor  uphold 
the  law  which  they  solemnly  swore  they  would  execute.  Congress  then 
passed  the  Act  of  June  25th,  1910,  authorizing  the  President  in  hi§  dis- 
cretion to  "temporarily  withdraw  from  settlement,  location,  sale  or  entry 
any  of  the  public  lands  *  *  *  and  reserve  the  same  for  water  power  sites, 
irrigation,  classification  of  lands  or  other  public  purposes  to  be  specified  in 
the  orders  of  withdrawal."  Pursuant  to  that  law,  the  President  has 
withdrawn  all  coal  lands  in  Alaska,  al!"  lands  in  Alaska  containing  petro- 
leum, oil  or  gas,  all  lands  in  the  vicinity  of  hot  springs,  all  lands  around 
the  shores  of  Resurrection  Bay,  and  has  made  other  withdrawals  too  num- 
erous to  mention.  Note  that  the  law  only  permits  the  withdrawal  of  a 
specific  area  for  a  specific  purpose,  which  purpose  must  be  stated  in  the 
order  of  withdrawal.  Instead  of  withdrawing  any  specific  area  of  coal  land, 
the  order  withdraws  all  coal  lands  in  Alaska.  In  other  words,  the  Executive 
order  absolutely  nullifies  the  Act  of  1900,  extending  the  general  coal  land 
laws  to  Alaska,  and  also  nullifies  the  Act  of  1904.  permitting  coal  loca- 
tions upon  unsurveyed  lands  in  Alaska,  both  of  which  Acts  of  Congress  ap- 


ply  only  to  Alaska,  and  are  entirely  annulled  by  such  withdrawals.  Clearly 
the  withdrawal  is  illegal.  In  the  first  place,  because  it  applies  to  all 
coal  lands,  while  the  Act  contemplated  the  withdrawal  of  only  specific 
areas.  Instead  of  doing  so  the  order  of  the  Executive  attempts  to  nullify 
and  hold  for  naught  at  least  two  Acts  of  Congress,  formally  enacted  by 
both  houses  with  the  approval  of  the  President.  Then,  too,  the  Act  speci- 
fies the  purposes  for  which  the  withdrawal  may  be  made,  and  requires  that 
such  purposes  be  stated  in  the  order  of  withdrawal.  What  is  stated?  Is 
there  any  pretense  that  such  withdrawal  was  made  for  ' '  water  power 
sites, "•'* irrigation"  or  "any  public  purpose?"  If  so,  such  purpose  is  not 
stated  in  the  order  of  withdrawal,  as  the  law  requires.  It  cannot  be  con- 
tended that  all  the  coal  lands  must  be  withdrawn  for  the  purpose  of 
classification,  because  the  fields  most  seriously  affected  are  already  classi- 
fied as  coal  lands.  But  lo  and  behold!  what  does  the  order  of  withdrawal 
state?  We  are  advised  that  such  withdrawal  of  ALL  the  coal  lands  in 
Alaska  is  made  in  "aid  of  legislation."  The  Act  of  June  25th,  1910, 
does  not  contain  these  words;  does  not  specify  any  such  grounds  for  with- 
drawal. It  is  the  opinion  of  the  lawyers  who  have  studied  the  subject 
that  even  the  existing  order  withdrawing  ALL  coal  lands  in  Alaska  from 
entry  is  illegal.  But  how  may  we  attack  the  legality  of  the  order!  The 
Land  Department  simply  refuses  to  take  action  upon  any  entries.  They 
simply  refuse  to  execute  the  law,  and  there  seems  to  be  no  method  by  which 
any  appeal  may  be  made  to  the  courts  for  a  judicial  review  of  the  ques- 
tion. Congress  refused  to  make  the  provision  recommended  by  Secretary 
Ballinger  that  an  appeal  might  be  taken  to  the  courts  from  the  decisions  of 
the  Interior  Department  even  upon  questions  of  law. 

Alaskans  are  in  full  sympathy  with  the  desire  of  the  people  of  the 
United  States  that  the  great  coal  fields  of  Alaska  shall  not  pass  into  the 
hands  of  a._private  monopoly,  to  be  exploited  solely  for  private  gain.  We 
believe  though  the  dangerof  such  monopoly  in  Alaska  has  been  greatly 
exaggerated.  In  fact,  we  who  know  conditions  in  Alaska,  are  convinced 
that  such  monopoly  cannot  arise  under  existing  laws,  if  properly  inforced. 
We  are  also  interested  in  the  men  who  discovered  these  coal  fields  and  re- 
vealed their  wealth  to  the  nation,  and  in  those  men  who  spent  their  time 
and  money  to  develop  and  prove  the  value  of  these  fields.  We  understand 
the  Act  of  1904  to  be  an  offer  by  the  government,  which  when  accepted 
by  the  bona  fide  locator  constitutes  a  contract  between  him  and  the 
government.  We  still  believe  that  the  American  people,  who  are  fair  ana 
honest  when  correctly  informed,  will  insist  that  the  contract  be  kept. 

We  deplore  the  delay  which  has  operated  so  much  to  our  disadvantage, 
caused  financial  loss  to  so  many  honest  men  and  women  who  invested 
perhaps  all  they  had  in  money,  labor,  health  and  enterprise,  and  gave 
several  of  the  best  years  of  their  lives,  relying  on  this  contract  with  the 
United  States.  We  refer  not  only  to  the  honest  coal  claimants,  but  still 
more  especially  to  the  far  more  numerous  band  of  hardy,  enterprising 
people  who  went  to  Alaska,  and  have  no  direct  interest  in  the  coal  fields, 
but  engaged  in  various  other  lines  of  business,  relying  on  the  opening  of 
these  coal  deposits  and  upon  the  building  of  railroads  and  smelters,  to 
which  the  use  of  this  coal  is  an  absolute  essential.  It  is  in  this  way  that 
the  great  loss  to  Alaska  and  Alaskans  has  really  been  suffered.  Our 
appeal  is  for  justice,  not  merely  to  the  honest  coal  claimants,  but  also,  and 
more  especially,  to  that  vast  body  of  Alaskan  pioneers  who  invested  their 
all  of  time  and  money,  labor  and  sacrifice,  enterprise  and  energy,  in  trust- 
ing that  the  law  of  1904  would  be  fairly  executed.  Those  pioneers  are 
indeed  the  same  honest,  rugged,  sturdy  men  and  women  who  conquered  the 
West,  who  opened  the  coal  fields  and  iron  mines  of  Pennsylvania  and  Ohio, 
who  converted  the  prairies  of  the  Mississippi  Valley  into  a  blooming  garden, 
who  have  conquered  the  plains  and  tunneled  th<?  mountains  and  made  the 
great  Northwest  yield  up  its  treasure  of  mine  and  field.  These  same  men 
have  gone  into  Alaska  and  endured  the  hardships  and  privations  of  the 


Northland  in  an  effort  to  open  up  that  country  in  whose  resources  they 
have  such  abundant  confidence.  Some  of  them  found  their  last  resting 
place  beneath  the  Northern  Lights.  Many  of  them  have  left  Alaska — 
disappointed  and  disheartened,  broken  in  health  and  spirit,  while  others 
still  remain  in  the  desperate  struggle,  many  of  them  simply  because  they 
are  unable  to  get  away.  It  is  difficult  to  picture  the  condition  of  thest 
disappointed  people  along  the  Alaska  Coast,  and  we  shall  not  attempt  it 
because  we  cannot  do  the  subject  justice  in  the  first  place,  and  our  picture 
would  be  deemed  over-drawn  if  we  correctly  portrayed  it.  These  men  have 
seen  public  officials,  senators,  congressmen  and  cabinet  officers  visit 
Alaska  and  depart  much  impressed,  but  no  results  followed  their  visit. 
Consequently,  it  is  not  strange  that  many  of  these  who  welcomed  Secretary 
Fisher  to  Alaska  on  his  recent  trip,  expressed  doubt  as  to  whether  results 
would  follow  it. 

Secretary  Fisher  grasped  the  situation,  however,  in  a  short  trip  suffi- 
ciently to  recognize  the  greatest  need  of  Alaska,  which  is  transportation. 
The  coal  is  important  chiefly  in  its  bearing  upon  transportation.  JWe  know 
_^that  the  Alaska  jioaJ,  is  of  higher  quality  than  any  other  on  tfie  Pacific 
cT)SSt,  whetfcefni  America,  Asia  or  Australia.  We  know  comparatively 
little,  however,  as  to  the  extent  of  the  deposits  and  the  possibility  of 
economical  mining.  Only  the  highest  grade  coal  of  Alaska  can  be  shipped 
from  the  territory  in  competition  with  other  fuel  along  the  Pacific  Coast. 
During  the  last  ten  years  the  Pacific  Coast  of  the  United  States  has 
consumed  annually  from  four  to  five  million  tons  of  coal.  There  has  been 
very  little  increase  Tn  that  consumption,  principally  because  during  tne 
same  period  the  production  of  oil  has  increased  so  rapidly,  that  now  we 
consume  fuel  oil  of  the  equivalent  of  more  than  eleven  million  tons  of 
coal  annually.  Most  of  our  shipping  is  now  operated  by  fuel  oil  which  is 
also  used  at  the  Treadwell  and  is  being  installed  on  the  Copper  Biver  Kail- 
road.  It  seems  unlikely  that  Alaska  steaming  coal  will  find  any  con- 
siderable market  outside  of  Alaska  unless  for  the  use  of  the  navy  which 
now  consumes  annually  about  150,000  tons  of  coal  and  burns  nearly  a  quarter 
of  that  amount  in  shipping  it  around  Cape  Horn.  .There  will  doubtless  be_ 
a  market  for  Alaska  anthracite,  particularly  in  thejGalifornia  cities^ but  it 
will  require  consIcTerable  capital,  not  only  to  mine  the  coal,  but  to  ship 
it  and  establish  bunkers  and  distribute  same  in  the  various  cities  so  tliat 
a  constant  supply  may  be  assured  at  a  reasonable  cost.  There  is  practically 
no  coking  coal  on  the  Pacific  Coast  and  consequently  there  is  much  promise 
for  the  Alaska  coking  coal,  but  even  the  market  for  coke  is  at  present 
limited.  It  has  no  competitor  in  smelting  and  steel  making,  and  with  the 
growth  of  these  industries  on  the  Pacific  Coast  the  demand  for  Alaska  coke 
will  increase.  Dr.  Brooks,  the  very  eminent  and  much  beloved  head  of  the 
United  States  Geological  Survey  in  Alaska,  estimates  that  there  is  a  market 
for  500,000  tons  annually  of  Alaska  coal  outside  of  that  territory.  Hence, 
the  importance  of  Alaska  coal  to  the  Pacific  Coast  has  been  greatly  exag- 
gerated. It  is  important  to  Alaska,  however,  for  we  cannot  hope  that 
railroads  will  be  built  in  Alaska  until  the  Alaska  coal  is  made  available, 
and  the  great  wealth  of  the  Interior  of  Alaska  is  awaiting  development 
which  can  only  come  with  adequate  transportation  facilities. 

I  Stop  to  think  of  it,  there  has  never  been  a  producing  mine  at  tide 
water  on  the  face  of  the  earth  outside  of  Alaska,  while  nearly  all  of  the 
producing  mines  in  Alaska  are  located  at  tide  water,  where  a  ship  may  load 
ore  from  the  bunkers.  Alaska  has  yielded  over  $200,000,000  in  precious 
metals,  practically  every  bit  of  which  has  been  taken  front  places  within 
sight  of  the  smoke  of  a  steamboat,  including  of  course,  the  placers  along 
the  Yukon  Eiver  and  its  tributaries.  |  We  know  of  mineral  deposits  of 
fabulous  wealth  in  the  interior,  immense  areas  of  lower-grade  placers,  rich 
gold  quartz,  and  mines  of  native  copper,  but  today  they  are  as  useless  to 
us  as  if  hidden  in  the  chasms  of  the  moon.  Transportation  is  required, 
railroads  must  be  built,  but  this  cannot  be  done  without  Alaska  coal./ 


8 

And  the  study  of  the  Alaska  transportation  problem  will  involve  considera- 
tion of  the  coal  fields.J  The  two  principal  fields  are  the  Bering  Eiver  and 
the  Matanuska.  The  Bering  Eiver  is  also  commonly  known  as  the  Katalla 
field,  as  it  is  near  that  town.  A  few  years  ago  the  Alaska  Syndicate  began 
the  construction  of  a  breakwater  at  Katalla  with  the  idea  of  developing 
a  harbor  there,  but  later  abandoned  the  project,  and  moved  its  terminals  to 
Cordova,  a  point  on  Prince  William  Sound,  from  which  the  Copper  River 
&  Northwestern  Railroad  has  been  built  easterly  across  the  Copper  River 
Delta  and  thence  up  that  valley  to  the  Bonanza  Copper  Mine.  A  branch 
line  could  be  built  from  this -road  so  as  to  make  a  total  haul  of  about  85 
miles  from  the  center  of  these  fields  across  the  Copper  River  Delta  to 
Cordova.  Much  has  been  said  recently  concerning  the  merits  of  Controller 
Bay  as  a  harbor  for  the  Katalla  fields.  Controller  Bay  is  situated  about 
15  miles  from  the  coal,  or  about  25  miles  from  the  center  of  the  field, 
and  has  the  advantage  of  distance  and  easy  grade.  The  government  charts 
show  a  sufficient  depth  of  water  in  Controller  Bay,  but  the  navigable 
channel  is  small  and  can  be  reached  only  by  building  several  miles  of 
trestle  over  the  mud.  These  trestles,  with  bunkers,  wharfes  and  terminal 
facilities  at  deep  water,  .will  be  expensive  to  construct  and  still  more 
expensive  to  maintain,  because  of  the  difficulty  with  ice  coming  out  of 
the  rivers  each  spring.  Then  too,  the  harbor  is  only  partially  protected 
and  is  exposed  to  some  of  the  most  dangerous  windstorms  that  visit  the 
Alaska  Coast.  The  Alaska  Syndicate,  financed  by  J.  P.  Morgan  &  Co. 
and  Guggenheim  &  Sons,  carefully  investigated  both  Controller  Bay  and 
Katalla;  and  spent  perhaps  more  than  a  million  dollars  at  the  latter  place, 
but  finally  abandoned  both  places  for  Cordova.  There  is  no  doubt  that 
Controller  Bay  is  avilable  as  a  harbor  for  some  portions  of  the  year,  but 
there  is  no  danger  of  a  monopoly  there  for  any  one  of  its  several  miles  of 
mud  flats  is  just  as  valuable  as  another,  and  we  regard  the  judgment  of 
th£  Alaska  Syndicate  as  expressing  the  general  opinion  of  all  people 
familiar  with  the  Alaska  Coast. 

The  Matanuska  coal  fields  can  be  reached  from  Seward,  on  Resurrec- 
tion Bay,  an  ideal  land-locked  harbor,  equal  to  any  on  the  Pacific  Coast. 
The  coal  measures  in  the  Katalla  field  are  much  broken,  and  require 
extensive  development  to  determine  the  most  economical  methods  ot 
mining.  The  Matanuska  coal  fields  are  reported  to  be  less  broken  but 
have  the  disadvantage  of  a  longer  haul.  Transportation  must  be  provided 
for  each  field,  and  this  includes  wharves,  bunkers  and  terminal  facilities, 
which  must  be  built  and  maintained  under  the  conditions  prevailing  along 
the  Alaska  Coast.  These  items  must  be  considered  in  our  study  of  any 
system  for  the  opening  of  the  coal  fields.  Alaska  requires  railroads  to 
reach  the  great  interior  and  permit  its  mineral  and  agricultural  develop- 
ment, but  coal  is  also  needed  for  such  railroads  and  for  use  throughout 
Alaska,  and  the  transportation  of  such  coal  is  thus  of  prime  importance. 
Secretary  Fisher  is  quite  consistent  in  his  conclusion  that  the  government 
should  provide  the  railroads  for  Alaska,  if  it  insists  upon  withdrawing 
from  capital  the  inducements  of  private  ownership  and  the  probable  increase 
in  value.  Even  the  inducement  of  private  ownership  in  the  lands  and  coal 
mines  was  not  sufficient  to  encourage  the  building  of  railroads  across  the 
public  domain  of  the  United  States.  The  first  trans-continental  railroads 
received  substantial  government  aid,  although  operating  at  a  time  when 
the  public,  land  .policy  of  the  government  was  most  liberal  to  settlers  and 
mineral  claimants.  If  government  assistance  were  needed  to  build  railroads 
across  Nebraska;  Colorado,  Utah  and  Nevada,  why  not  also  in  Alaska, 
especially  in  view  of  the  determination  of  the  government  to  deal  far  less 
liberally  with  the  pioneers  in  the  matter  of  its  public  lands  in  Alaska. 
Sound  reasons  exist  for  government  construction  of  or  aid  to  railroads  in 
Alaska  entirely  independent  of  the  coal  question.  The  future  of  Alaska 
depends  upon  the  development  of  the  coal  and  copper  mines  and  the 
low-grade  placers  of  the  great  interior,  and  upon  the  agricultural  develop- 


9 

ment  of  the  valleys  which  is  sure  to  follow.  Alaska  is  in  the  same  latitude 
as  Norway,  Sweden  and  Finland.  The  cities  of  Cordova  and  Seward  in 
Alaska  are  in  the  same  latitude  as  Christiana  in  Norway,  Stockholm  in 
Sweden  and  St.  Petersburg  in  Russia,  while  Kodiak,  Juneau  and  Ketchikan 
correspond  to  Aberdeen  and  Glasgow  in  Scotland.  The  agricultural  areas 
of  Alaska  are  as  much  larger  and  will  ultimately  become  as  much  more 
important  than  the  combined  agricultural  areas  of  Norway,  Sweden,  Fin- 
land and  Northern  Russia,  as  the  Japan  Current  in  the  Pacific  is  larger 
and  more  influential  than  the  Gulf  Stream  in  the  Atlantic.  This  is  not 
a  wild  prophesy,  for  the  farming  operations  already  conducted  in  these 
valleys  assure  that  success  whenever  transportation  and  a  convenient 
market  is  provided.  Railroads  through  such  valleys  are  necessary  before  the 
farms  will  be  developed,  and  this  means  that  the  raliroads  must  be  operated 
for  some  years  at  a  loss,  or  at  least  without  profit.  The  government  will 
not  give  a  land  grant  to  aid  such  a  railroad,  although  the  value  of  its 
public  lands  would  be  multiplied  by  its  construction.  Why  should  not 
the  government  build  the  road  itself  as  the  government  has  done  in  Canada 
and  in  four-fifths  of  the  countries  of  the  world?  The  government  should 
build  railroads  more  cheaply  for  it  can  sell  its  3  per  cent  bonds  at  par 
while  a  private  corporation  must  sell  its  6  per  cent  bonds  at  a  discount. 
The  private  corporation  must  at  least  earn  its  fixed  charges,  while  the 
government  can  afford  to  make  lower  rates  and  even  operate  at  a  loss  for 
a  time  to  encourage  the  great  development  which  will  surely  follow  and 
more  than  justify  the  investment.  Then,  too,  the  development  will  proceed 
more  rapidly  ahead  of  railway  construction  by  the  government  whenever  a 
route  has  been  selected.  Capital  can  then  be  induced  to  begin  the  develop- 
ment of  mines  in  the  interior,  and  homesteaders  will  settle  in  advance  of 
the  construction  of  such  roads  because  of  the  assurance  of  the  government 
that  the  road  will  be  built,  while  in  the  case  of  private  corporations,  with 
the  long  record  of  receiverships  which  have  attended  such  pioneer  railroads, 
both  in  the  United  States  and  Alaska,  it  will  be  necessary  to  see  the 
smoke  of  the  engine  along  the  route  before  capital  will  be  justified  in 
making  any  heavy  expenditures  in  the  development  of  the  interior.  Rail- 
roads built  in  Alaska,  and  gradually  extended  from  year  to  year,  will  shorten 
each  year  the  winter  routes  to  the  interior  and  on  to  Nome,  and  will  justify 
the  construction  of  road  houses  and  even  villages  along  the  line  of  such 
route,  affording  inns  for  the  traveler,  and  providing  a  development  in 
advance  of  railway  construction  which  will  make  the  transportation  routes 
the  more  quickly  profitable. 

I  But  while  transportation  is  the  important  question,  and  coal  is  import- 
ant chiefly  in  its  bearing  upon  transportation,  yet  we  must  revert  back  to 
the  consideration  of  the  coal  question  before  the  transportation  problem 
will  be  solved,  even  with  the  government  railroads  in  Alaska,  for  it  is 
inconceivable  that  the  government  will  build  railroads  and  still  continue 
to  ship  coal  around  Cape  Horn  for  the  use  of  the  navy  upon  the  Pacific 
Coast.  It  is  costing  the  navy  the  price  of  a  battleship  every  two  years  to 
bring  coal  from  the  Atlantic  Coast  for  use  on  the  Pacific,  and  the  money 
which  may  be  saved  in  this  way  by  the  use  of  Alaska  coal  will  pay  the 
interest  and  provide  a  sinking  fund  for  the  retirement  of  bonds  for  the 
construction  of  two  trunk  lines  from  the  Coast  of  Alaska  to  the  Yukon.  I 

But  how  is  the  coal  to  be  utilized?  A  leasing  system  has  been  sug- 
gested, and  it  now  seems  so  popular  throughout  the  United  States  to 
advocate  such  a  leasing  system  that  even  our  own  people  are  disposed  to 
accept  it  as  inevitable.  We  seem  to  forget  that  we  tried  the  leasing 
system  in  this  country  years  ago  with  disastrous  results.  For  more  than 
forty  years  we  tried  to  develop  the  coal  and  lead  mines  of  Indiana,  Illinois 
and  Missouri  and  the  copper  mines  of  Michigan  upon  a  leasing  system, 
but  utterly  failed  to  do  so.  Missouri  insisted  upon  being  shown,  with 
the  result  that  she  was  the  first  state  enabled  to  throw  off  the  shackles 
of  a  leasing  system.  But  the  legislature  of  Illinois  found  it  necessary 


10 

to  memorialize  Congress  many  times,  and  for  years  the  states  of  Illinois, 
Indiana  and  Michigan  waged  the  fight  for  private  ownership.  They  needed 
the  coal.  They  wished  the  lead  and  copper  mines  developed,  and  that 
devlopment  did  come  when  private  ownership  of  the  mines  was  made 
possible.  This  is  a  matter  of  history,  admitted  by  all  who  read  its  pages. 
Even  the  advocates  of  a  leasing  system  must  admit  its  failure  in  the  early 
development  of  those  states.  And  they  are  at  a  loss  to  offer  any  explana- 
tion of  difference  in  conditions  which  will  make  a  leasing  system  successful 
now  though  a  failure  years  ago.  At  least  the  experience  of  the  Northwestern 
States,  situated  in  the  same  conditions  that  Alaska  is  today,  should  be 
the  best  guide  for  the  development  of  Alaska. 

Poor  old  Alaska  has  surely  had  quite  enough  of  the  leasing  system.  It 
was  leased  by  Kussia  from  1799  until  1867  to  the  Russian-American  Company. 
That  company  was  the  absolute  lord  and  master,  and  its  leasehold  sov- 
ereignty absolutely  prevented  development.  Fortunately  nobody  was  lured 
there  under  false  promises.  Only  those  went  there  who  did  so  for  the 
Bussian-American  Company.  A  leasing  system  was  not  inflicted  upon 
honest,  trustful  pioneers  as  is  now  proposed  by  the  American  government. 
Fortunately  also  for  the  United  States,  Alaska  was  not  colonized  or 
settled  by  the  Russians.  Their  leasing  system  prevented  it.  Otherwise 
the  Russian  people  would  have  so  well  developed  Alaska  by  1867  that  the 
United  States  could  not  have  bought  it  fo.r  two  cents  an  acre,  with  its 
wonderful  fisheries  and  a  fur  seal  herd  of  6,000.000  thrown  into  the  bargain. 
The  first  thing  we  did,  however,  was  to  lease  that  seal  herd  to  a  company 
which  in  forty  years  made  a  net  profit  of  $5.738,000  and  depleted  the  seal 
to  about  75,000.  In  the  meantime,  the  United  States  Government  spent  more 
money  in  patroling  the  seal  islands  than  it  obtained  from  royalties  on 
the  lease,  and  Alaska  got  absolutely  nothing,  not  a  cent  in  taxation,  not  a 
light-house,  not  a  schoolhouse,  not  as  much  as  a  flag  pole.  Now,  the 
United  States  Government  has  gone  into  the  sealing  business  itself,  and 
has  already  begun  to  make  a  profit.  This  experience  may  be  an  argument 
for  government  construction  of  railroads  in  Alaska  and  even  for  the 
government  operation  of  coal  mines,  but  is  surely  no  argument  for  the 
adoption  of  a  leasing  system.  It  must  be  admitted  that  leases  can  only  be 
taken  by  men  or  corporations  who-  possess  the  necessary  capital.  There  if 
absolutely  no  encouragement  to  the  prospector.  Under  the  system  of  pri- 
vate ownership  the  prospector  who  acquires  title  to  a  valuable  coal  deposit 
can  find  some  basis  to  ask  capital  to  assist  him  in  its  development.  But 
can  a  mere  prospector  or  any  man  of  small  capital  secure  additional  capital 
upon  the  securities  of  a  mere  lease?  Manifestly  not.  The  adoption  of  a 
leasing  system  means  the  elimination  of  the  prospector  who  gave  knowledge 
of  these  deposits  to  the  world.  How  shall  Alaska  be  explored  except  by 
the  prospector?  It  is  a  well-known  fact  that  able  geologists  passed  over 
the  great  Matanuska  coal  fields  without  discovering  their  existence.  This 
is  not  said  to  their  discredit,  but  as  an  illustration  of  the  fact  that  only 
the  prospector  who  spends  his  entire  lifetime  in  the  field  can  thoroughly 
explore  the  ground.  Such  exploration  is  not  the  work  of  geologists  but  is 
the  work  of  the  prospector.  If  we  are  to  have  any  progress  in  the  mineral 
development  of  this  country  we  must  encourage  the  prospector,  and  we 
must  not  forget  that  much  derided  "non-resident"  who  furnishes  the 
prospector  his  grubstake.  Neither  of  them  will  exist  under  a  leasing 
system.  A  still  greater  objection  to  the  leasing  system  is  that  it  leads 
inevitably  to  monopoly.  The  allurements  of  private  ownership  with  its 
promised  increase  in  the  value  of  the  land  encourages  competition  in  pro- 
duction. Competition  leads  to  a  careful  study  of  economical  mining. 
Manifestly  no  one  can  be  induced  to  take  a  lease  on  coal  lands  except 
upon  reasonably  liberal  terms.  In  fact,  the  terms  must  be  so  liberal,  es- 
pecially in  Alaska  with  expensive  mining  and  a  limited  market,  that  the 
lessee  will  be  practically  assured  of  a  certain  market  without  competi- 
tion. Now  that  is  precisely  what  is  proposed  by  the  Secretary  of  the 


11 

Interior.  Secretary  Fisher  says:  ''The  prime  requisites  of  a  leasing  system 
are  that  only  sufficient  coal  lands  should  be  leased  to  meet  the  existing 
market  and  encourage  its  development."  Now  think  of  that  confession. 
It  is  an  admission  that  the  government  must  limit  the  area  leased  in  order 
to  encourage  someone  to  take  a  lease.  It  is  an  admission  that  the  govern- 
ment must  protect  that  lessee  in  his  "existing  market."  It  utterly  elimi- 
nates competition.  It  does  not  encourage  economical  mining.  It  does  not 
compel  the  lessee  to  study  the  cheapest  method  of  extraction  and  to  provide 
the  most  modern  and  improved  machinery  and  to  utilize  the  waste  and  to 
develop  every  possible  source  of  profit  in  his  mines.  No,  for  only  suffi- 
cient coal  lands  will  be  leased  to  meet  the  " existing  market"  and  protect 
the  lessee  in  that  market.  That  is  the  avowed  plan  of  the  Secretary  oi 
the  Interior.  We  must  admit  that  Secretary  Fisher  has  outlined  a  possible 
leasing  system.  Yes  indeed,  and  a  profitable  leasing  system — for  the  lessee. 
Why  if  you  owned  every  foot  of  coal  lands  in  Alaska  and  had  no  other 
interest  in  Alaska,  you  would  probably  do  just  what  Secretary  Fisher 
proposes.  Lease  it  out  in  limited  areas  here  and  there,  just  enough  to 
enable  the  lessee  to  meet  the  existing  market  at  the  highest  price  that 
market  will  stand.  But  if  you  owned  all  coal  fields  in  Alaska  and  all  the 
other  public  lands  in  Alaska,  and  were  interested  in  the  material  develop- 
ment of  the  agricultural  and  mineral  resources  of  Alaska,  then  you  would 
adopt  the  most  liberal  policy  possible  in  the  coal  fields;  permit  the  mining 
of  that  coal  upon  the  largest  scale  possible  and  its  use  to  the  consumer  at 
a  cost  to  be  regulated  by  competition,  and  you  would  encourage  the 
prospector  and  the  grubstaker  and  the  miner  to  find  and  deliver  more  coal 
fields  and  the  capitalists  to  build  more  railroads  to  those  fields  and  to 
open  up  those  mines  and  provide  the  greatest  competition  possible.  Why  a 
leasing  system  on  the  plan  outlined  by  Secretary  Fisher  must  inevitably 
lead  to  such  a  monopoly  as  will  make  the  evils  of  so-called  "private  ex- 
ploitation" fade  into  insignificance.  It  is  significant  that  the  coal  barons 
of  the  East,  of  Pennsylvania  and  West  Virginia,  are  the  men  who  advised 
Secretary  Fisher  that  a  leasing  system  should  be  adopted  in  Alaska.  It 
is  significant  too  that  George  W.  Perkins,  late  partner  of  J.  P.  Morgan  & 
Company,  interested  in  the  Alaska  Syndicate,  is  now  an  avowed  advocate  of 
the  leasing  system.  He  says  he  reached  that  conclusion  when  he  visited 
Alaska  in  1909  in  the  interest  of  the  Alaska  Syndicate.  Why  did  he  not 
say  so  then?  Evidently  because  he  deemed  it  inexpedient  to  do  so.  Does 
he  reflect  the  sentiment  of  the  one  syndicate  which  will  inevitably  have  a 
monopoly  on  the  Katalla  fields  if  a  leasing  system  be  adopted? 

We  are  told  that  the  leasing  system  has  been  successful  in  Canada, 
New  Zealand  and  Australia.  Why  there  is  not  a  single  coal  mine  in 
British  Columbia  or  the  Yukon  Territory  operated  upon  a  leasing  system, 
although  the  system  in  British  Columbia  really  amounts  to  private  owner- 
ship. The  lessee  in  British  Columbia  may  obtain  a  lease  of  6400  acres  for 
five  years,  with  renewal  for  three  years,  but  he  has  always  an  option  to 
purchase  the  land'  at  $20  per  acre.  However,  the  coal  of  British  Columbia 
is  being  mined  upon  granted  lands.  There  is  a  law  for  leasing  coal  lands 
in  the  Yukon  Territory,  but  the  only  attempts  to  operate  under  that  law 
have  resulted  in  disastrous  failures.  In  fact  the  failure  of  the  leasing 
system  in  Canada  has  been  so  pronounced  that  we  have  heard  little  about 
it  during  the  last  six  months.  We  are  now  referred  to  New  Zealand  and 
Australia  as  shining  examples  of  the  success  of  this  government  landlord 
system.  It  is  advocated  in  the  report  of  Mr.  Veatch  who  was  sent  there 
by  our  government  to  investigate  the  success  of  the  leasing  system  in  those 
far-off  lands  which  have  furnished  coal  and  coke  to  our  Pacific  Coast  and 
even  to  smelters  in  Alaska.  The  trouble  with  that  report  is  that  instead 
of  being  a  fair,  unbiased  investigation,  such  as  should  be  conducted  at 
government  expense,  any  reader  must  be  convinced  that  the  author  was 
simply  seeking  material  to  support  his  preconceived  idea.  Wliile  ostensibly 
sent  there  to  investigate  a  leasing  system,  it  seems  he  really  went  there  to 


12 

find  arguments  to  support  it.  Consequently  instead  of  investigating  the 
system  he  investigated  the  lessees,  and  of  course,  he  found  them  satisfied. 
Why  not!  They  have  a  government  protected  monopoly.  The  coal  opera- 
tors in  New  Zealand  meet  annually  and  fix  the  price  of  coal  without  let  or 
hindrance  from  the  government.  Just  read  the  report  of  the  Minister  or 
Mines  of  New  Zealand.  Bead  the  statement  in  that  report,  that  "the 
colliery  proprietors  have  decided  that  the  price  of  coal  for  1911  shall  remain 
the  same  as  in  1910,  which  was  $2.68  per  ton."  The  average  price  of  coal 
in  the  United  States  under  our  system  of  "private  exploitation"  is  $1.12 
per  ton,  according  to  the  statement  01  George  Otis  Smith,  Director  of  the 
U.  S.  Geological  Survey.  Of  course  the  government  lessees  are  satisfied 
in  their  government  protected  monopoly.  From  the  official  reports  of 
New  Zealand  for  1909  we  find  142  mines  operated  under  lease  and  two  by 
the  government.  But  on  further  inquiry  we  find  that  4  mines  produced 
half  the  entire  product  of  two  million  tons;  six  produced  a  quarter  and  two 
government  mines  produced  290,000  tons.  So  that  132  small  mines  pro- 
duced less  than  7  tons  per  day  and  were  operated  to  supply  small  isolated 
communities.  In  other  words,  ten  mines  control  the  output.  The  average 
annual  production  per  man  was  630  against  760  in  the  United  States, 
though  we  know  that  the  coal  measures  in  New  Zealand  are  more  favorable 
for  economical  mining  than  the  average  throughout  the  United  States. 
In  New  South  Wales,  Australia,  the  average  production  per  miner  during 
1909  was  given  as  425.  The  cost  of  coal  at  pit  mouth,  however,  in  New 
South  Wales  was  $1.65;  throughout  Australia  $1.88  and  in  New  Zealand 
$1.95  as  against  $1.07  throughout  the  United  States  in  1909.  These  state- 
ments are  taken  from  the  official  reports  which  also  show  that  coal  was 
mined  in  the  United  States  in  1910  for  88  cents  per  ton  less  than  in  New 
Zealand;  58  cents  less  than  in  New  South  Wales,  and  81  cents  less  than 
the  general  average  for  Australia  that  year.  1  am  advised  by  men  who 
lived  in  Australia  that  the  most  crude  methods  are  employed.  Wheel- 
barrows are  used  in  practically  all  the  mines  instead  of  cars  and  tracks, 
and  yet  we  are  referred  to  Australia  and  New  Zealand  as  an  example 
which  we  should  follow.  A  little  investigation  of  the  subject  will  cause 
the  advocates  of  a  leasing  system  to  cease  their  reference  to  Australia  and 
New  Zealand  just  as  completely  as  they  have  dropped  their  refernce  to 
British  Columbia,  and  I  suppose  they  will  pass  on  next  to  Madagascar  or 
some  other  no  man's  land  from  which  to  draw  their  beautiful  illustrations 
of  beneficent  government  landlordism  which  should  be  adopted  by  patriotic, 
enterprising,  independent  Americans. 

Dr.  George  Otis  Smith,  in  his  address  before  the  American  Mining 
Congress  in  Chicago  last  October,  made  perhaps  the  best  argument  for  the 
leasing  system  which  has  ever  been  presented.  He  dwelt  strongly  upon 
the  advantages  to  capital  in  saving  the  cost  of  the  investment  in  the  mine. 
That  is  the  great  trouble  with  the  arguments  of  the  advocates  of  ;the 
leasing  system.  They  base  them  always  on  the  standpoint  of  the  lessee. 
We  are  willing  to  admit  that  the  lessee  may  prosper  under  the  leasing  sys- 
tem, but  how  about  the  consumer,  and  how  about  the  development  of  the 
country?  These  are  the  vital  points  to  be  considered.  We  care  little  for 
the  royalties  which  may  be  more  or  less.  The  lessee  can  well  aford  to  pay 
a  substantial  royalty  for  a  government  protected  monopoly,  especially 
since  he  will  pass  it  on  to  the  consumer.  That  is  not  the  point.  Who  will 
discover  the  coal  deposits?  Certainly  not  the  prospector  who  knows  he 
cannot  obtain  money  on  a  mere  lease  to  develop  any  deposits  he  may 
discover.  Indeed,  he  cannot  even  obtain  a  grubstake  to  hunt  for  coal. 
And  what  about  the  consumer  who  must  buy  from  the  lessee  operating  on 
a  government  lease  without  competition?  Will  this  provide  cheaper  fuel? 
Will  it  encourage  the  manufacture  of  coke  which  is  so  much  desired  for 
the  treatment  of  the  copper  ores  in  Alaska?  This  is  an  item  of  the  utmost 
importance.  Indeed  the  coking  coal  is  the  most  important  coal  in  Alaska. 
And  what  is  needed  more  than  anything  else  for  the  mining  industry  of 


13 

Alaska  is  the  assurance  of  an  adequate  supply  of  coke  at  a  reasonable 
cost.  Smelters  and  matting  plants  would  then  be  built  along  the  Alaska 
Coast  for  the  treatment  of  low-grade  copper  ores,  which  really  have  more 
metal  contents  than  the  low-grade  copper  ores  of  Montana  and  other 
states.  These  ores  exist  in  infinite  variety  all  along  the  Alaska  Coast. 
Desirable  blends  of  ore  can  be  brought  together  at  different  places  and  a 
copper  matte  produced  that  will  stand  shipment  around  the  world,  if 
only  an  assured  supply  of  coke  be  provided  at  a  reasonable  price.  The 
smelter  at  Hadley,  Alaska,  paid'  as  high  as  $30  a  ton  for  coke  from  Canada 
and  Australia,  and  even  then  '  operated'  successfully  while  copper  was 
commanding  upwards  of  15  cents.  With  Alaska  coke  at  $8.00  per  ton,  the 
operation  of  such  smelters  would  be  possible,  even  at  the  present  low 
price  of  copper.  Ships  return  from  Alaska  practically  without  cargo. 
They  could  bring  coal  and  coke  and  distribute  it  along  the  Coast  at 
reasonable  freight  rates,  but  we  must  first  have  an  assured  supply  at  a 
fixed  reasonable  cost.  The  lessee  will  have  no  interest  in  developing  the 
future  market.  He  will  try  to  get  all  he  can  out  of  the  present  marked 
He  cannot  afford  to  encourage  future  consumption  by  giving  low  prices, 
thus  to  develop  a  large  market,  for  he  must  make  all  the  money  he  can 
out  of  his  lease  right  away.  This  condition  may  be  an  argument  for  the 
mining  of  coal  and  manufacture  of  coke  by  the  government,  but  it  cer- 
tainly is  not  an  argument  for  the  adoption  of  a  leasing  system. 

Even  the  lessee  will  have  one  serious  disadvantage  under  a  lease 
from  the  government.  Dr.  Smith  bases  his  entire  argument  upon  the 
assumption  that  the  government  will  always  treat  the  lessee  with  fair- 
ness. The  lessee  though  will  always  consider  the  fact  that  when  he  takes 
a  lease  from  the  government  he  must  submit  all  his  disputes  with  the 
lessor  to  that  same  lessor  for  decision.  The  courts  will  not  be  open  to  him 
for  the  adjustment  of  differences.  He  must  settle  the  same  with  an 
autocratic  bureau  clerk  4,000  miles  away,  or  with  an  under-paid  and  there- 
fore inexperienced  and  incompetent  inspector  on  the  ground.  At  least, 
that  is  the  universal  experience  with  the  government  bureaus  thus  far  in 
the  administration  of  public  lands. 

Is  it  not  a  little  strange  that  the  advocacy'  of  a  leasing  system  should 
proceed  from  so-called  conservationists?  Do  they  honestly  believe  that  a 
lessee  will  better  conserve  the  coal  in  a  leased  rriine  than  the  man  who 
actually  owns  that  mitie?  Of  course,  we  all  believe  in  conservation,  as 
we  all  believe  in  economy,  though  there  may  be  a  wide  difference  of 
opinion  as  to  what  constitutes  either.  It  is  interesting  to  note,  how- 
ever, that  these  so-called  conservationists  who  so  eloquently  champion  the 
leasing  system  are  largely  the  same  men  who  until  recently  have  pre- 
dicted the  utter  exhaustion  of  our  natural  rsources.  Wle  have  not  heard 
so  much  on  this  subject  lately,  because  the  facts  are  becoming  better 
known.  Think  of  Illinois  with  200  billion  tons  of  coal  of  which  she  has 
mined  only  733  million  during  nearly  seventy  years.  It  may  be  illus- 
trated as  the  case  of  a  man  who  was  given  $200,000  in  cash  at  birth,  and 
during  a  lifetime  of  70  years  spent  only  $733.  But  as  against  the  200 
billion  of  Illinois,  Wyoming  has  424  billion,  and  has  not  mined  enough  to 
fairly  sample  it.  The  high  priest  of  the  conservation  movement  foretold 
recently  from  spiritualistic  visions  the  utter  destruction  of  our  timber. 
We  have  not  enough  to  last  30  years,  he  said.  Yet  the  bureau  in  which 
he  did  such  effective  work,  much  for  good,  yet  some  for  evil,  is  authority 
for  the  statement  that,  even  adding  the  destruction  by  fire  and  allowing 
for  the  enormous  waste  in  our  forests,  our  timber  is  still  increasing  by  a 
natural  growth  about  three  times  as  rapidly  as  we  are  using  it.  And  as  for 
water  power,  well,  the  watershed  of  the  Columbia  River  alone  has  so  much 
water  power  that  if  we  were  now  to  proceed  to  harness  it  at  the  rate 
of  10,000  horse  power  per  year  it  would  take  us  over  2,000  years  to  do 
it.  Yes,  a  period  longer  than  the  Christian  era  just  to  install  the  equip- 
ment to  put  all  this  power  in  use. 


14 

The  situation  in  Alaska  is  deplorable.  I  say  deplorable  because 
while  nature's  bounties  are  so  great  and  every  other  condition  so  favor- 
able, the  government  policy,  or  lack  of  policy,  alone  retards  and  prevents 
its  development.  The  adminstration  might  afford  relief  by  a  public  land 
policy  which  would  encourage  development.  It  might  well  do  so  under 
existing  laws,  inadequate  though  those  laws  are  in  many  respects,  The 
President  might  make  a  lawful  withdrawal  of  Alaska  coal  lands,  suffi- 
cient in  area  to  protect  the  public  interests,  instead  of  the  illegal  blanket 
withdrawals  which  are  now  being  enforced.  Entries  of  coal  lands  might 
be  permitted  in  certain  areas  and  fair  treatment  accorded  the  entrymen. 
Not  only  might  this  be  done,  but  it  is  the  positive  duty  of  the  adminis- 
tration to  do  so.  It  is  the  duty  of  the  executive  to  enforce  the  law  as  it 
stands,  but  both  the  present  and  the  preceding  administrations  have 
conceived  it  to  be  an  executive  duty  to  recommend  new  laws  and  in  the 
mean  time  suspend  the  laws  already  in  force.  The  President  and  the 
Land  Department  should  recommend  to  Congress  such  changes  in  the 
law  as  they  believe  best  for  the  public  interest,  but  the  Executive  has 
no  right  to  annul  existing  laws.  No  right  I  say  to  disregard  the  laws 
which  the  executive  has  sworn  to  execute.  It  is  a  sad  commentary  on  our 
system  to  observe  the  President  of  these  United  States  taking  solemn 
oath  to  uphold  and  enforce  the  law  and  then  deliberately  disregarding, 
yes,  and  annuling  certain  laws  and  refusing  to  enforce  the  same  just 
beeause  (in  the  opinion  of  the  Executive)  Congress  should  enact  a  dif- 
ferent law.  Even  if,  under  stress  of  circumstances,  and  in  response  to 
a  great  popular  demand,  the  President  might  be  induced  to  do  so  for  a 
time  long  enough  to  permit  Congress  to  act,  yet  what  can  we  say  when 
such  suspension  is  continued  over  a  long  period  of  years?  I  repeat  the 
Alaska  people  are  patriotic.  Not  only  that,  but  they  have  confidence  in 
the  integrity  and  good  intentions  of  our  government  and  the  men  who 
compose  it.  We  fully  appreciate  the  dignity  of  the  office  of  President, 
and  the  ability,  purity  and  integrity  of  the  great  man  who  fills  that 
office.  We  are  delighted  with  the  interest  taken  in  Alaska  by  the  aole 
and  energetic  Secretary  of  the  Interior,  and  appreciate  the  value  of  several 
suggestions  he  has  made,  and  hope  that  his  better  recommendations  will 
be  carried  into  effect.  But  will  Congress  act?  And  if  not,  has  not  Alaska 
already  suffered  long  enough  from  the  Alphonse  and  Gaston  plays  between 
the  executive  and  the  legislative  departments  of  our  government. 

After  all,  Alaska  is  not  suffering  so  much  from  the  evils  of  law 
as  from  the  evils  of  the  system.  Our  public  land  administration  is  such 
under  bureaucratic  domination  that  the  development  of  the  public  lands 
everywhere  is  retarded.  We  note  this  more  severely  in  Alaska  because 
there  we  have  practically  no  land  in  private  ownership.  Do  you  realize 
fully/  however,  that  in  the  great  states  of  Oregon,  Idaho.  Montana  and 
Washington  development  upon  the  public  lands  is  almost  at  a  standstill? 
The  same  policy  is  responsible.  Alaska  is  the  most  deplorable  illustration 
at  this  time,  because  she  has  practically  no  land  in  private  ownership.  Do 
you  realize  that  in  the  Northwestern  States  our  development  is  practically 
confined  to  the  lands  already  in  private  ownership,  and  that  even  in 
these  states  the  development  of  our  public  lands  is  practically  at  a  stand 
still!  And  why!  Is  it  because  Congress  willed  it,  and  has  so  legislated? 
No,  the  bureaus  have  legislated!  The  whole  policy  of  the  land  depart 
ment  '  has  'been  changed  in  recent  years.  The  bureaucrats  have  con- 
strued "the  law  to  mean  just  what  they  think  it  should  mean.  For  in- 
stance, the  department  has  been  called  upon  for  nearly  forty  years  to 
declare"  what  is  necessary  to  constitute  opening  and  improving  a  coal 
mine  under  the  Act  of  1873,  in  order  to  give  a  preference  right  to  pur- 
chase. They  give  these  words  a  reasonable  construction.  As  late  as 
n 900  the  Secretary  of  the  Interior,  in  the  case  of  Eeed  vs.  Nelson,  (29  L.  D.. 
615),  opinion  written  by  Judge  VanDevanter,  then  Assistant  Attorney 
General,  but  now  on  the  Supreme  bench,  held  that  Nelson  had  "  opened 


15 

and  improved"  a  coal  mine  within  the  meaning  of  that  act  when  the 
record  showed  that  "an  open  cut  was  run  a  short  distance  and  then  a 
shaft  sunk  disclosing  a  4-foot  vein  of  coal."  Now  the  Alaska  law  of 
1904  uses  the  same  words,  and  provides  that  any  person  "who  shall  have 
opened  or  improved  a  coal  mine  or  coal  mines  on  any  of  the  unsurveyed 
public  lands  of  the  United  States  in  Alaska  may  locate"  the  same  as 
a  coal  mine.  But  in  the  one  Alaska  case  which  has  actually  come  before 
the  Department  for  consideration  they  have  held  that  a  tunnel  driven 
255  feet  into  the  mountain  side,  along  a  vein  of  coal  with  11  cross-cuts 
showing  the  vein  to  be  more  than  20  feet  in  width,  is  not  "opening  or 
improving"  a  coal  mine,  although  several  hundred  tons  of  coal  per  day 
might  immediately  be  taken  from  that  same  tunnel.  The  Department 
contends  that  this  was  not  opening  or  improving,  but  prospecting.  They 
evidently  do  not  believe  that  a  mine  is  a  deposit  of  minerals  which  can 
be  worked  at  a  profit,  but  insist  on  regarding  the  tunnel,  shafts  and 
other  workings  as  the  mine,  rather  than  the  minerals  thus  explored,  and 
255  feet  of  tunnel,  attaining  a  depth  of  several  hundred  feet  with  11 
cross-cuts  and  a  body  of  coal  available  sufficient  to  yield  an  immediate 
output  of  several  hundred  tons  per  day,  is  not  sufficient  workings  to 
constitute  a  mine,  because  the  tunnel  was  intended  primarily  to  prospect 
and  explore  the  coal  bodies.  They  regard  the  workings  as  constituting 
the  mine  rather  than  the  minerals,  and  I  suppose  those  learned  bureau- 
crats will  set  a  high  value  upon  the  splendidly  developed  mine,  with  a 
complete  system  of  workings,  from  which  every  bit  of  coal  has  been 
extracted.  That  is  the  logical  result  of  their  interpretation,  if  it  is  the 
workings  which  constitute  the  mine  rather  than  the  minerals.  If  a 
cow  were  hid  in  the  tall  grass,  and  a  pole  used  to  push  aside  the  grass 
so  as  to  reveal  the  cow,  I  suppose  these  learned  men  would  say  that  the 
opening  in  the  grass  is  really  the  cow.  This  Alaska  decision  ignores  the 
case  of  Reed  vs  Nelson,  not  even  referring  to  it.  Its  logic  is  the  more 
ridiculous  when  you  consider  the  fact  that  the  law  provides  that  such 
coal  mine  must  be  "opened  and  improved"  before  a  location  can  be  made. 
In  other  words,  the  department  tells  you  that  you  must  have  a  completely 
equipped  coal  mine,  with  tunnels,  shafts,  up-raises,  stopes  and  cross-cuts, 
mining  machinery,  cars  and  equipment,  yes.  and  you  must  have  all  'these 
before  you  even  locate  a  coal  mine.  And  yet.  that  same  Land  Depart- 
ment will  not  permit  one  to  ship  a  pound  of  coal  from  the  mine  until 
after  the  patent  proceedings  have  been  completed  and  the  purchase  price 
paid.  The  Chief  of  the  Field  Division  actually  closed  down  in  1908  the 
only  coal  mine  operating  at  Katalla  fields  simply  because  the  patent 
proceedings  were  not  then  completed,  and  although  completed  and  the 
purchase  price  paid  that  same  year,  no  action  has  since  been  taken  upon 
that  entry,  no  charges  filed  against  it,  simply  nothing  done. 

Alaska  merits  your  careful  consideration  and  your  most  helpful  assist- 
ance. But  after  all,  it  is  only  one  part  of  the  great  problems  which  must 
be  faced  by  the  people  in  the  public  land  states./  This  public  land  question 
has  not  received  the  serious  consideration  of  our  people  which  it  merits. 
Tt  has  not  received  the  due  study  and  attention  of  the  senators  and  repre- 
sentatives in  Congress  from  the  public  land  states.  At  the  coming  election, 
and  hereafter,  let  us  see  to  it  that  only  men  are  sent  to  Washington  who 
are  familiar  with  this  great  question,  who  will  study  it  carefully,  and  who 
are  courageous  enough  to  stand  for  the  right  regardless  of  the  possible 
loss  of  administration  favor  or  political  prestige. 

We  must  realize  that  the  advocates  of  the  leasing  system  do  not  pro- 
pose to  stop  with  leasing  coal  lands.  Indeed,  they  admit,  or  at  least 
most  of  them  admit,  that  they  believe  all  mineral  lands  should  be  leased. 
Some  are  fair  enough  to  sav  that  any  rovalties  derived  from  such  leases 
should  go  to  the  states  or  communities  .But  this  removes  only  one  of  the 
lesser  ob.iections  to  the  leasing  system.  There  might  be  no  serious  objec- 
tion to  the  leasing  of  oil  lands,  for  the  situation  there  is  materially  differ- 


1G 

ent,  and  if  the  advocates  of  a  leasing  system  are  really  earnest  in  their 
desire  to  develop  that  system  and  prove  its  value,  they  might  urge  that 
it  be  applied  first  only  to  oil  lands.  Their  efforts  along  those  lines  might 
result  in  something  that  would  encourage  development  of  the  oil  lands  of 
Alaska.  But  those  iconoclasts  are  not  content  to  carefully  develop  such 
important  changes  in  our  public  land  system.  The  fact  is  this  agitation 
comes  principally  from  the  bureaucrats  in  Washington,  prompted  largely 
by  personal  motives,  though  doubtless  so  fanatical  as  to  believe  themselves 
really  honest.  The  men  we  send  to  Washington  must  be  prepared  to  meet 
this  great  issue.  The  American  people  as  a  rule  are  fair  when  fully  in- 
formed, and  it  is  our  duty  as  well  as  to  our  interest  to  correctly  inform 
them.  The  Federal  Government  should  go  out  of  the  public  land  business, 
and  the  remaining  public  lands  should  be  ceded  to  the  different  states 
where  they  would  be  managed  by  men  close  to  the  people  who  use  these 
lands,  and  responsible  to  the  people  of  the  whole  state  who  are  most 
interested  in  their  development.  It  may  take  years  to  bring  this  about, 
but  we  should  conduct  the  campaign  of  education.  .We  have  arguments  to 
support  it,  even  from  the  conservation  standpoint,  f  Our  states  are  afford- 
ing the  only  substantial  fire  protection  which  is  given  to  our  forests. 
Our  State  of  Washington  has  passed  the  laws  for  the  protection  of  our 
salmon.  This  state  alone  maintains  23  fish  hatcheries  and  employs  more 
men  to  enforce  the  laws  and  protect  our  fish  within  the  limited  area  of 
Puget  Sound,  than  the  Federal  Government  does  over  the  thousands  of 
miles  of  the  Alaska  Coast.  This  state  has  checked  the  decline  and  has 
actually  increased  the  annual  run  of  fish.  But  in  Alaska,  where  the  supply 
was  enormously  greater  than  anything  ever  known  in  this  state,  the  salmon 
are  threatened  with  extinction,  because  of  the  lack  of  proper  laws,  properly 
enforced,  and  proper  means  to  replenish  the  supply.  In  the  state  it  is 
a  matter  of  intimate  domestic  concern.  For  Alaska,  the  subject  must  be 
handled,  if  at  all,  by  a  congress  indifferent  to  and  ignorant  of  the  whole 
subject. 

The  Alaska  question,  in  its  final  analysis,  is  simply  the  public  land 
question  which  from  now  henceforth  must  receive  the  most  serious  con- 
sideration of  the  people  of  our  public  land  states,  if  our  lands  are  to  be 
made  the  happy  homes  of  progressive  Americans  rather  than  of  the  serfs  of 
an  absentee  landlordism  from  which  the  people  of  Ireland  are  just  now 
arisimg  after  the  struggle  of  the  centuries..' 


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